Organizational Culture

What is Organizational Culture? Why Values? and What Does Warren Buffet Have To Do With It?


Every organization has a culture – even if it’s not written about on the company website, or talked about as part of the on-boarding process – it’s there. But what is “it”? What is culture, and why is it so easy to describe for some organizations and such an enigma for others?

In a recent DeGarmo survey of 333 (mostly HR) professionals, 60% indicated that organizational culture is “the sum of values, norms, and beliefs that work to hold an organization together and create a shared vision.” Warren Buffet has been quoted saying that, “Culture, more than rule books, determines how an organization behaves.” When respondents were asked whether or not they agree to this statement the majority indicated that, “Yes, culture is the key characteristic for an organization to demonstrate its unique competitive advantage and drive behavior.” 

Who knew that an organization’s culture had such a big impact on its ability to succeed? More than other things, an organization’s values determine its culture. Values provide a guiding architecture that drives performance and behavior. Individuals and organizations (as a whole) have value systems that influence their attitudes, behaviors, and the ways in which they allocate resources. Values are the backbone or glue behind organizational culture. They are a shared intersection that provide a foundation behind “who” an organization is.

This is why so many organizations take the time and effort to define their core values and share them with their employees, customers, and the general public – the organizational culture illustrates who the organization is by identifying what it finds important and what it values. But let’s not forget that organizations are made of people – and those people need to support the vision of the organization and exemplify the values.  This is why it’s critical to ensure individual values align with the organization’s values to drive key behaviors – the notion of culture fit (see Putting Value Congruence to Work to learn more).

Research on culture fit by DeGarmo supports the importance of value alignment. People with stronger indicators of culture fit report higher levels of job satisfaction, organizational commitment, fewer withdrawal cognitions (i.e., thoughts about eventual turnover), and are less likely to engage in turnover related behaviors (e.g., looking for a new job). Our case study, “Strong Culture Fit Keys Valued Outcomes,”  demonstrates the impact of value alignment within a telecommunications company. In summary, culture – through values – can be leveraged to drive organizational effectiveness, which we explored in our recent post, “3 Steps To Driving Organizational Effectiveness Through Culture.” Suffice it to say, don’t assume that others know about your culture.  Benchmark and define your values, communicate them, and put them to work for you!

Your Talent Assessment Team @DeGarmo